House Price Index

March 2017 - Market battles on to near two-year high

Fast Facts

  • Scotland prices up just 0.1% in March but average prices highest in two years.

  • New peak prices in South Lanarkshire and the Highland district.

  • Overall shortage of housing stock increasing buyer demand and maintaining prices in some areas.

Headline News

  • After a strong February when prices grew 1.1%, values were essentially flat in March, rising just 0.1% or £157. Annual price growth in Scotland now stands at 1.8%, down from 2.9% in February – the largest reduction in growth of all the regions in Great Britain.

  • Nevertheless, growth in Scotland is still faster than in Greater London (1.4%), as well as the North East (0.1%), and equals that of Yorkshire and Humberside. Average prices in Scotland, at £173,335, meanwhile, are at their highest since May 2015, and its biggest cities Edinburgh and Glasgow have recorded strong growth.

  • The most recent transaction figures show sales volumes for the full year in 2016 were 1% lower than in 2015.

Quick Quotes

Christine Campbell, Your Move managing director in Scotland, said:

“A slow down in growth doesn’t change the remarkable resilience of the Scottish housing market. Prices are now at their highest since the upset to the market caused by the introduction of the LBTT in 2015.”

Alan Penman, business development manager for Walker Fraser Steele, one of Scotland’s oldest firms of chartered surveyors and part of the LSL group of companies, said:

“The market looks in strong shape, despite sluggish growth. While a few high value sales continue to distort average prices in a number of areas, the real engine driving steady growth in the Scottish market is the solid performance of property in its two biggest cities: Edinburgh and Glasgow.”

Key insights

  • Neither of the big recent political developments in Scotland – the snap General Election nor the Scottish Parliament’s backing vote for a second independence referendum, in April and March respectively – are reflected in these figures. The date for triggering Article 50 and formally beginning the Brexit process was known, but decisions to buy and sell are likely to have been made well before.

  • Even with this foresight, there’s little evidence to suggest prices would be dramatically different. The market has proved remarkably steady in the last year, barely registering the Brexit vote. Prices have moved within a range of just +2.7% over the period: £168,745 at their lowest last July, and £173,335 at their highest in March.

  • That disguises significant differences across the key local authority areas that account for the lion’s share of the market in terms of sales volumes, though. Annual price changes to March ranged from 5.1% and 8% growth in Edinburgh and Glasgow, respectively, to falls of 4.1% and 3.7% in Fife and Aberdeenshire. Among the other local authorities, a couple of big sales meant the largest monthly rises were in Clackmannanshire, up 8.4% this month and 11.6% annually, as a result of the sale of its highest priced property (£885,000) for a year, and in East Lothian, up 4.5%, helped by the purchase of a £1.1 million detached home on the Inveresk Estate on the outskirts of Edinburgh.

  • On an annual basis, the biggest increase was in Argyll and Bute at 12.8%, again assisted by the purchase of high priced homes – five of them costing more than £500,000 in Helensburgh, a 40 minute commute to Glasgow Queen Street station. Average prices in the area are now £167,922, raising it to the 12th most expensive area in Scotland, from the 18th a year ago.

  • The most expensive area remains Edinburgh, with average prices of £250,107, followed by East Renfrewshire (£243,365) and East Dunbartonshire (£242,450). The cheapest is North Ayrshire, which has also seen one of the biggest falls in prices this year (down 5.1%) after West Lothian (down 7.1%) and Inverclyde (down 5.6%).

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